IT portfolio rationalisation: how CIOs are surviving economic turmoil

In the face of the current economic climate, many CIOs are asking how they can rationalise their IT portfolio. They want to know how they can keep the lights on and continue planning for expansion, all the while sticking to a reduced budget.

While this may sound impossible — especially against today’s backdrop — now is the time to think creatively and determine which investments will quickly result in lower costs and increased benefits.

By leveraging these efficient and strategic cost-saving technologies, CIOs can successfully continue IT operations with minimal disruption, helping the business continue to run as normal at a time they need it the most.

Project prioritisation

At the beginning of the year, Gartner announced worldwide IT spend was projected to total $3.9 trillion in 2020, an increase of 3.4% from 2019. Despite uncertainty driven by Brexit and the potential of a global recession, organisations were setting their sights on a variety of hardware, software and IT services.

Today’s reality is very different, with the analyst firm since predicting an 8% decline in spending due to the impact of Covid-19. Instead of planning for innovation and growth, CIOs are now prioritising mission-critical technologies that are crucial to the every-day running of the business.

New projects have quickly been put on hold, premium support has been lowered to standard levels, and in many cases, renewals on certain technologies have been completely eliminated. IT teams are under pressure to make some difficult decisions. As such, they must evaluate which tools and platforms are going to deliver the most value — not just now, but in the months and years of recovery to come.

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Short-term results vs long-term gain

Despite efforts to reduce costs having a positive short-term impact on the business, it could end up doing more harm than good in the long run. When the economy eventually picks back up and returns to some form of normality, many organisations will find themselves back at square one. Previous attempts to adapt and modernise their IT infrastructure will have been reverted and they will have to go through the same process again.

Fortunately, there are technologies that can help to immediately cut spending, while also enabling future growth. Modern approaches such as data virtualisation, for example, allow businesses to do more with less.

Data virtualisation technology establishes an enterprise-wide layer that provides real-time, consolidated views of data across both old and new applications, simultaneously. This means IT teams can slowly onboard any new applications in cloud environments, all the while gradually retiring expensive on-premise applications.

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Investing in efficiency

By abstracting underlying IT changes from business users using data virtualisation, CIOs can also continue operations without disrupting other areas of the business. Data virtualisation understands which data resides in which application, and fetches the right data from the right location. This relieves users from having to know exactly where the data sits, or which format it is stored in, saving both time and money.

By enabling real-time data delivery minimising data replication, data virtualisation also saves on the cost of storage and the time it takes to physically extract, transform, and load data into new systems. Many organisations, such as Logitech, have successfully used data virtualisation to migrate from on-premise systems to the cloud. Today, most of the company’s applications run on the cloud, saving on infrastructure and storage costs, as well as the number of IT resources. The leading market analyst Gartner has estimated that organisations using data virtualisation save more than 45% in data integration and delivery.

Since IT is not a direct revenue generator, but an enabler, it can be difficult to defend against cost-cutting activities across the wider business. However, it’s important to remember that technology has a profound impact on wider organisational operations. Whether across security, efficiency, visibility or communication, the benefits are endless. As such, it is critical to maintain the right level of cost-cutting and continuation.

Just as automakers emerged from the 1970s oil crisis by inventing fuel-efficient cars, CIOs may well come out of the current economic climate by leveraging different, more efficient technologies. As IT teams continue evaluating their portfolios, contemplating what stays and what goes, they should focus on the tools and platforms that will have the most profound impact. Keeping costs down is essential, but so is maintaining competitive advantage and navigating the uncertain times ahead.

Written by Alberto Pan, chief technical officer, Denodo

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